The synthetic short stock position consists of selling a call option and buying a put option at the same strike price and in the same expiration cycle. The strategy replicates shorting 100 shares of stock, but with a potentially lower margin requirement.
In this video, you’ll learn:
1. What are the characteristics of the synthetic short stock strategy?
2. What does the expiration risk graph look like for a synthetic short stock position?
Also, you’ll see the performance of a real synthetic short stock position compared to an actual short stock position.
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